Difference Between: CGST Vs SGST Vs IGST
July 30, 2019
Difference Between: CGST Vs SGST Vs IGST
Recently, the Goods & Services Tax (GST) was introduced and it replace over 10 other existing taxes levied by the central and state governments. The three main concepts that you need to know about are GST, Central GST and Integrated GST. From here, you will get to know about these and to whom these are applicable.
Goods & Services Tax (GST) will replace over 10 central and state taxes, so obviously it comes with new concepts that will need understanding: Central GST, State GST and Integrated GST are three of them. Let’s find out what they are:
Central GST
Central GST is the component of GST that will be levied by the central government on all items, both goods and services. It only applies to intra-state trade. A dealer can use input tax credit of CGST against CGST or IGST.
State GST
State GST is the component of GST that will be levied by the state government on all items, both goods and services. It only applies to intra-state trade. A dealer can use input tax credit of SGST against SGST or IGST.
Integrated GST
Integrated GST is the component of GST that will be levied by the central government in case of inter-state trade. It is applicable on all items, both goods and services. A dealer can use input tax credit of IGST against SGST, CGST or IGST.
What is the Exemption Limit?
GST is applicable to all dealers with a turnover of over Rs. 20 lakh (Rs. 10 lakh in North Eastern states) in case they are involved exclusively in intra-state trade (i.e. their supplies and sales are within a single state). In case of any inter-state activity, GST is applicable regardless of turnover.
Composition Scheme
The GST Composition Scheme is applicable only on traders operating in a single state with a supply turnover of less than Rs. 50 lakh. Supply turnover includes any freebies, discounts and even goods and services not liable to be taxed.
Remember that GST is applicable to those dealers who earn a turnover of over Rs. 20 lakh. This amount is Rs. 10 lakh in the North Eastern regions. Notably, this amount is for those involved in intra-state trade. If it is an inter-state trade, then GST is applicable for any turnover that the business makes. It is important to get an understanding and pay the right tax for the income you earn.
Hi :) My name is Muskan Agarwal. I am very headstrong and go getter in whatever i do. I work as a paralegal in the team and try to bring value in my work.
Muskan Agarwal
